Antofagasta says profit rose 2 percent in 2007

Antofagasta PLC, a Britain-based mining company with operations in Chile, said Tuesday full-year profit rose 2 percent after metals prices went up.

Net income for the 12 months through Dec. 31 rose to US$1.38 billion (euro898 million) from US$1.35 billion in the previous year, the company said in a statement. Revenue rose 1.2 percent to US$3.8 billion (euro3.47 billion).

"During 2007 metal prices remained well above historical levels," the company said.

London copper prices averaged 323.3 cents per pound compared with 305.3 cents per pound in the previous year, ranging from a low of under 240 cents to a peak of nearly 380 cents, reflecting changes in market sentiment during the year.

The company said the market for copper was volatile in 2007 but the company expects demand to remain fundamentally sound in the coming year and forsees continued strength China and in regions such as South Asia and the Middle East.

In 2008, copper production is expected to increase by about 8 percent to 463,000 tonnes (510,370 US tons). In 2007 it rose 5.9 percent.

That growth "is expected to help offset the effects of a slowdown in the United States. Supply continues to be affected by disruptions, including labour disputes, energy supply constraints, equipment availability and longer lead times to develop new projects," Antofagasta said.

The molybdenum business was also strong in 2007 as demand outstretched supply. Prices rose to an average US$30 a pound from US$25 at the start of the year. "Demand is expected to remain strong, driven by the continued demand from both the steel and catalyst sectors," the company said in its statement. Molybdenum is used in the construction of high-strength alloys.

The company also said it would seek new business by searching for sources of geothermal energy.

"As countries in the southern cone (of South America), particularly Chile, are facing severe problems relating to shortages of energy supplies and significantly increasing costs, the group has decided to enter the energy exploration business and has formed management and exploration teams to search for geo-thermal prospects," Antofagasta said.